Accountable Capitalism

When Massachusetts Sen. Elizabeth Warren introduced her Accountable Capitalism Act it was hailed on the left as “bold new legislation to curb corporate greed,” and criticized on the right as a proposal to “destroy capitalism” and “nationalize every major business in the United States of America.”

However, the reality is very different. Sen. Warren’s bill is not radical at all. Rather, it represents a much needed attempt to return our country to the commonsense economic policy that guided its growth and prosperity for most of our history.

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In 1981, the Business Roundtable wrote in its Statement on Corporate Responsibility that companies should always consider the effects their actions have on a number of groups including their shareholders, their communities, their employees, and society at large. But by 1997, their Statement on Corporate Governance discussed only how they could best serve their shareholders.

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Is there anything we can do now that will cause our corporations to better serve our country? The answer to that question is a very clear “yes.” There are in fact many things we can do.

Certainly one significant possibility, as suggested in Warren’s bill, is to have employees serve on the boards of our largest corporations along with those who represent the shareholders, and that the board clearly acknowledge its obligation to consider the interests of all the stakeholders.

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We live in a complex world and different approaches may work better in different industries. Some of these many possibilities are discussed in an article I wrote with economic historian Richard Sylla, The American Corporation. Many more are discussed in Christopher Mackin’s Wealth at Work: Employee Ownership and Responsible Accumulation.

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It is important to realize that the problem we have today with our corporations is not a problem of evil men. Rather, it is the natural result of a flawed system.

 &nbspRalph Gomory @ ;The Hill

AND evil men....but hey, do what you want...you will anyway.